With the ever-growing number of laws governing the private rented sector, becoming a landlord for the first time can be somewhat daunting. Here are a few top tips to make sure you understand your legal obligations so you can be sure that you don’t fall foul of landlord legislation.
First and foremost, you need to check if you need a landlord license from your local council before your property can legally be rented out. This legislation was introduced in 2006 with the main purpose of ensuring landlords maintain their rental properties to a good standard.
As a landlord, you will need to rigorously reference new tenants to check they are reliable and will be able to meet rent payments each month. These include credit eligibility, employer checks and previous landlord references. Most importantly, landlords must check that their tenants have the right to lawfully live in the UK. Failure to undertake a Right to Rent under the Immigration Act 2014 can result in a fine or even a jail term, so it’s important they are conducted thoroughly.
Tenancy Deposit Protection (TDP)
If you take a deposit from your tenants you must protect it in one of the Government-authorised Tenancy Deposit Protection schemes. There are three available – Deposit Protection Service (DPS), MyDeposits or the Tenancy Deposit Scheme (TDS). You will need to protect the deposit within 30 days of receiving it and provide the tenant with both the Deposit Protection certificate and completed Prescribed Information. Failure do so could result in you not being able to evict your tenant plus the full return of the deposit and a fine of up to three times the value of the deposit.
Energy Performance Certificate (EPC)
You must serve your tenants with an Energy Performance Certificate. As of the 1st April this year, your property must be at least EPC band E before letting it out. If you’re caught arranging a new let without ensuring your property is up to these standards, you could be fined. In addition, since the 6th April this year, you could be banned from managing your property for breaching a number of laws about how you manage your rental property. This means your local authority would take control of your property, and collect the rent. But you would still be liable for the mortgage and any costs such as repairs.
As a landlord, you are responsible for ensuring the property is safe for your tenants, and as a part of this, you are legally required to get all gas appliances checked by a Gas Safe registered engineer every year. You must then provide tenants with a Gas Safety Certificate within 28 days of the annual check taking place. In addition to this, fire alarms should be fitted on every storey of the property from the start of the agreement, and carbon monoxide detectors must be in any room where solid fuel is used – both alarms have to be tested on the first day of the tenancy.
Written tenancy agreement
A tenancy agreement is a document between tenant and landlord that sets out the terms of the tenancy. Although written agreements aren’t a legal requirement, it’s best practice so both the tenant and landlord are clear on what their rights and responsibilities are.
It’s important to undertake regular inspections of the property, although remember that you cannot enter the property without the tenant’s permission as this is classed as trespassing and is illegal. It’s best practice to grant them 24 or 48 hours’ written notice, and this should be stipulated in your tenancy agreement.
If you do not inform your buildings insurer that you’re renting your property out, you risk invalidating your policy. Most standard buildings insurers don’t provide the protection you require as a landlord, so it’s worth taking out specialist landlord insurance. A good policy will cover loss of rent, damage, legal expense and liabilities.
Get the property rental ready
If you are offering your property as a furnished home, think carefully about what you can provide. Remove anything valuable or sentimental – aside from the fact they’re at risk of damage, it can be off putting for tenants to rent a property that is filled with someone else’s belongings. You should also think about the type of tenants you want; if you’re hoping a family will move in for a few years, they may have their own furniture already and therefore won’t want your stuff. However, if you’re renting to university students, it’s highly unlikely they’ll have accumulated enough belongings to furnish a house. Regardless of who your tenants are, before anyone comes to view your property, make sure it is clean, tidy and you have completed any modernisation or DIY projects.
Peter Savage, President, ARLA Propertymark comments: “Landlords are governed by more than 145 pieces of legislation. And whether you’re an accidental landlord, or a professional one, the same rules apply, so it’s important you’re up to speed before marketing your property. If you haven’t complied with all these important steps at the start of the tenancy, you may find yourself in a vulnerable position should anything go wrong. For example, you won’t be able to evict your tenants in the unlikely event that you need to; it takes 43 weeks on average to regain possession of a property from the Court, and can be a very complicated process.
“As a landlord, if you are confident that you understand all the laws and can implement them correctly, you can self-manage. If you are not, and do not want to risk tens of thousands of pounds in fines and potential prison sentences, use an ARLA Propertymark Protected agent who will guide you through the process and ensure there aren’t any mistakes made. Letting your property is a big decision, both for you and the tenants that will be living there and it is very important you understand and appreciate what this business relationship entails.”